Back in 1935 the recessed cylinder was a sales and marketing point for S&W.
There were still a fair number of cartridges that were being loaded in balloon head cases at the time, meaning the case was far weaker than the modern solid head case we have today.
While rare, blowouts were known to happen in balloon head cases.
As it was being advertised as a FAR more powerful handgun, S&W decided that the recessed cylinder could be a strong selling point, and early advertisements touted the safety factor that the recessed cylinder provided.
In reality, the .357 Magnum was never, to the best of my knowledge, loaded with balloon head cases, but perception based on decades of experience can be a very tough thing to shake, so S&W did what it could to allay fears of case head ruptures.